Overlook smithy, first in town (6)
I believe the answer is:
forget
'overlook' is the definition.
(I've seen this before)
'smithy first in town' is the wordplay.
'smithy' becomes 'forge' ('forge' can be a synonym of 'smithy').
'first in' says to take the initial letters.
The initial letter of 'town' is 't'.
'forge'+'t'='FORGET'
(Other definitions for forget that I've seen before include "Fail to remember" , "Slip one's mind" , "Be unable to recall" , "Overlook" , "Lose memory of" .)